This Stock Just Doubled Its Net Income

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There are many sectors to look at when considering long-term investing strategies. Obviously, regardless of the sector, the key is continued growth in corporate earnings. Long-term investing is about being in the right stocks as they go through a period of strong corporate earnings growth.
One interesting company that is quite unique in the penny stock space and might be one to watch for those interested in long-term investing is FONAR Corporation (NASDAQ/FONR). This company is a medical device supplier that manufactures machines for magnetic resonance imaging (MRI) and scanning. The company also provides management services to various health care providers.
The reason this company stands out for long-term investing purposes is that it has developed a new technological innovation through the development of an upright multi-positional MRI scanner. While the company is the oldest MRI firm in this sector, it continues to innovate with this new MRI device that can help improve a health care professional’s ability to diagnose diseases.
The company just released its corporate earnings report for its fiscal 2012 year, which ended on June 30, and the results are quite strong. The firm had corporate earnings of $6.9 million for the year, as compared to $3.3 million for fiscal 2011, more than doubling its net income. Net income per diluted share was $0.91 for fiscal 2012, as compared to $0.55 year-over-year
Total revenue recorded for the 2012 fiscal year was $39.4 million, up from $33.1 million for fiscal 2011, an increase of 19%. While total costs did increase, they did so at a lower rate, rising by only 15% year-over-year.
The market obviously liked the corporate earnings result and drove the stock up sharply.
When considering companies for long-term investing, one should look for an edge in the market. FONAR’s upright MRI machines have been shown to provide a possible early diagnosis for the genesis of multiple sclerosis (MS). For those interested in the research, it was published last year in Physiological Chemistry and Physics and Medical NMR (September 20, 2011; 41: 1–17).
With more research being conducted, if we see more positive results, the demand for the company’s machines should continue to grow for many years. This type of thesis is important when considering long-term investing options.
Don’t rush into any trade if you’re considering any stock for long-term investing. You wouldn’t rush to buy a private company or real estate investment; so it follows that you should always carefully consider all variables when it comes to long-term investing. That said, this company does have a unique niche in the health sector that should drive corporate earnings for many years. I would suggest much more research and due diligence before committing capital to long-term investing.

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